Ethiopia has surpassed Tanzania and Uganda as the leading destination for Kenya’s investment abroad, propelled by growth in the neighbouring market.
Kenya’s direct investments in Ethiopia stood at Sh60.2 billion in 2021 ahead of outward direct investments of Sh51.5 billion and Sh56.3 billion to Tanzania and Uganda, respectively. Ethiopia has tilted the tables in its favour, outperforming Tanzania, the seasoned preferred destination for Kenya’s investment abroad. From 2015, Tanzania reigned as the leading destination for Kenya’s investments, however, the outward cash flows plunged in 2018, only to recover in 2021.
“Tanzania was the leading destination for the country’s investment abroad at the start of 2015 the review period, with investments declining in 2018, but later recovering to reach Sh51.5 billion in 2021” the Economic Survey 2023 briefed.
Kenya’s investments in Ethiopia attained its peak in 2021 at Sh60.2 billion. Many Kenyan firms have made entry into the Ethiopian market including the Telecommunication giant Safaricom which commenced operation under its subsidiary Safaricom Telecommunications Ethiopia private limited company (STE). The telco’s operations in Ethiopia started in Dire Dawa as the pilot region with plans to spread to other cities already affirmed.
KCB has also depicted plans to enter the Ethiopian market after Ethiopia’s Council of Ministers agreed to open up the financial sector to foreign investors.
